Deflation is a model applied to monetary policy that works by controlling the circulating supply of an asset against expansion.

      Traditional monetary models, such as fiat currency, are inflationary. The units that are in circulation are increased every year by ~1-4%. The theory behind inflation is that there is always growing economic demand alongside a growing population. While there is merit behind the theory, it exposes its user base to constant devaluation. Deflation on the other hand, does not allow for supply to grow, and promises a better environment to preserve value. A prime example of a deflationary model is that of gold or Bitcoin; there is a limited supply of both at any given moment.

      Related Terms:



BTC: bc1qcskmel9llhrdqj3arxyqnennx4ashvfutlreyy
LTC: ltc1qa0fj4lcu5365rep50aza5fqqvx8ef0afemh6s5
ETH: 0x071D72dbc48ad2Fe35daE256eCF0834C5dde688c
DASH: XgXHqVyJiQNdVVszH9cnqCP4uWcP8tVxdK
BNB: bnb1mau4j8kry0jgw45ufy69hvhd0k04llet8fk2p6

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